Investments

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion’s rabbi trusts and classified as trading totaled $116 million and $110 million at March 31, 2015 and December 31, 2014, respectively. Cost method investments held in Dominion’s rabbi trusts totaled $6 million at both March 31, 2015 and December 31, 2014.

Decommissioning Trust Securities

Dominion holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion’s decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses⁽¹⁾				Fair Value
(millions)
March 31, 2015
Marketable equity securities:
U.S. large cap	$	1,265	$	1,338	$	—			$	2,603
Marketable debt securities:
Corporate bonds	440		23		(1		)		462
U.S. Treasury securities and agency debentures	576		17		(1		)		592
State and municipal	356		24		—				380
Other	122		—		—				122
Cost method investments	77		—		—				77
Cash equivalents and other⁽²⁾	8		—		—				8
Total	$	2,844	$	1,402	$	(2	)	⁽³⁾	$	4,244
December 31, 2014
Marketable equity securities:
U.S. large cap	$	1,273	$	1,353	$	—			$	2,626
Marketable debt securities:
Corporate bonds	424		19		(2		)		441
U.S. Treasury securities and agency debentures	597		13		(4		)		606
State and municipal	332		23		—				355
Other	66		—		—				66
Cost method investments	86		—		—				86
Cash equivalents and other⁽²⁾	16		—		—				16
Total	$	2,794	$	1,408	$	(6	)	⁽³⁾	$	4,196


(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability.


(2)	Includes pending sales of securities of $3 million at both March 31, 2015 and December 31, 2014.


(3)	The fair value of securities in an unrealized loss position was $239 million and $379 million at March 31, 2015 and December 31, 2014, respectively.

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at March 31, 2015 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	233
Due after one year through five years	383
Due after five years through ten years	435
Due after ten years	505
Total	$	1,556

Presented below is selected information regarding Dominion’s marketable equity and debt securities held in nuclear decommissioning trust funds.



	Three Months Ended March 31,
	2015		2014
(millions)
Proceeds from sales	$	337	$	442
Realized gains⁽¹⁾	56		38
Realized losses⁽¹⁾	17		6


(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Dominion were not material for the three months ended March 31, 2015 and 2014.

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses⁽¹⁾				Fair Value
(millions)
March 31, 2015
Marketable equity securities:
U.S. large cap	$	573	$	592	$	—			$	1,165
Marketable debt securities:
Corporate bonds	247		11		—				258
U.S. Treasury securities and agency debentures	190		3		(1		)		192
State and municipal	209		14		—				223
Other	31		—		—				31
Cost method investments	77		—		—				77
Cash equivalents and other⁽²⁾	4		—		—				4
Total	$	1,331	$	620	$	(1	)	⁽³⁾	$	1,950
December 31, 2014
Marketable equity securities:
U.S. large cap	$	563	$	594	$	—			$	1,157
Marketable debt securities:
Corporate bonds	242		9		(1		)		250
U.S. Treasury securities and agency debentures	197		3		(2		)		198
State and municipal	197		13		—				210
Other	23		—		—				23
Cost method investments	86		—		—				86
Cash equivalents and other⁽²⁾	6		—		—				6
Total	$	1,314	$	619	$	(3	)	⁽³⁾	$	1,930


(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability.


(2)	Includes pending sales of securities of $4 million and $6 million at March 31, 2015 and December 31, 2014, respectively.


(3)	The fair value of securities in an unrealized loss position was $120 million and $170 million at March 31, 2015 and December 31, 2014, respectively.

The fair value of Virginia Power’s marketable debt securities at March 31, 2015 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	51
Due after one year through five years	168
Due after five years through ten years	245
Due after ten years	240
Total	$	704

Presented below is selected information regarding Virginia Power’s marketable equity and debt securities.



	Three Months Ended March 31,
	2015		2014
(millions)
Proceeds from sales	$	133	$	204
Realized gains⁽¹⁾	18		19
Realized losses⁽¹⁾	11		3


(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Virginia Power were not material for the three months ended March 31, 2015 and 2014.

Equity Method Investments

Dominion Gas

Dominion Gas accounts for the following investment under the equity method of accounting:



Company	Ownership%		Investment Balance				Description
			March 31, 2015		December 31, 2014
(millions)
Iroquois	24.72	%	$	103	$	107	Gas transmission system
Total			$	103	$	107

Dominion Gas' equity earnings on this investment totaled $8 million for both the three months ended March 31, 2015 and 2014. Dominion Gas received distributions from this investment of $12 million and $5 million for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and December 31, 2014, the carrying amount of Dominion Gas' investment exceeded its share of underlying equity in net assets by approximately $8 million. The differences reflect equity method goodwill and are not being amortized.

Dominion and Dominion Gas

Blue Racer

In December 2012, Dominion formed Blue Racer with Caiman to provide midstream services to natural gas producers operating in the Utica Shale region in Ohio and portions of Pennsylvania. Blue Racer is an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital.

Dominion NGL Pipelines, LLC was contributed in January 2014 by Dominion to Blue Racer, prior to commencement of service, resulting in an increased equity method investment of $155 million, including $6 million of goodwill allocated from Dominion's goodwill balance to its equity method investment in Blue Racer.

In March 2014, Dominion Gas sold the Northern System to an affiliate, that subsequently sold the Northern System to Blue Racer for consideration of approximately $84 million. Dominion Gas' consideration consisted of $17 million in cash proceeds and the extinguishment of affiliated long-term debt of $67 million and Dominion's consideration consisted of cash proceeds of approximately $84 million. The sale resulted in a gain of approximately $59 million ($35 million after-tax for Dominion Gas and $34 million after-tax for Dominion) net of a $3 million write-off of goodwill, and is included in other operations and maintenance expense in both Dominion Gas' and Dominion's Consolidated Statements of Income.